Apparently this new security feature in iOS 7 is supposed to deter theft of Apple iPhones, iPods and iPads when iCloud users enable the feature.

Doing so will prevent any unauthorized users from accessing the device regardless of restoring or wiping the device, essentially making the iPhone, iPod or iPad an expensive paperweight.

But does this new feature actually prevent theft and achieve it’s primary goal of reducing victims? Sadly, the answer is no!

IOS 7 Activation Lock “Find My iPhone” Overview

Apple users having an iPhone, iPod or iPad that have upgraded to iOS7 will have automatically have this theft “deterrent” out of the box. Users must establish an iCloud account and also enable the feature through the settings of the phone. Once done, the iCloud user can essentially be in full control of allowing or disabling use of the device remotely via their online iCloud account through Apple’s website.

Even if an unauthorized user cracks the devices pass code, users who activate iCloud’s “Find My iPhone” feature have the ability to disable or reset the device. Factory resets from the software settings or iTunes (including DFU mode restores) will retain activation of this feature.

Prior to this new feature, thieves that obtained devices with pass-code locks simply had to restore the device in order to be able to use or sell the phone. The victim’s personal information would be erased through the restore, but this did little to prevent theft being that the thieves primary goal was to resell the device to a new user rather than commit identity theft or commit any other crime with the victim’s personal data.

Reasons Why iOS7 iCloud “Find My iPhone” Fails to Deliver

Feature Adoption – Even with a lot of press about this new feature, not all Apple device users will adopt this new security enhancement. Many users will continue to use the lock screen’s pass code as the primary security feature. Thieves know this and will simply continue stealing the devices, and there is a decent probability that the phone won’t have this feature enabled.

Reduce Value Worth The Risk - The value of a stolen phone with the activation lock is significantly less than one without. But at the end of the day, it’s still a very expensive piece of hardware that has extremely valuable individual components. The thief might make less money, but there are plenty of legitimate businesses that have the need for the individual components, such as LCD assemblies, batteries, cameras and chips on the main board. The thief still has a device that has a significant payout that’s worth the risk.

Similar Looking Models - An iPhone 4, 4s, 5, 5s and 5c have different features, but for the most part their physical appearance in size and layout are fairly similar. Without an activation lock, an end user in today’s market can get $200 for an iPhone 4s, and $400 for an iPhone 5. However, the value of an activation locked iPhone 5 drops to the $260-ish range. Thieves might not have the opportunity to identify the model of the phone before they pick-pocket an owner. He or she is simply going to take the opportunity they have and know a minimum payout is present, which is still very lucrative.

Liquid Un-Policed Market - Until it’s harder for thieves to sell these stolen devices, they will continue to steal. Craigslist and eBay essentially goes unchecked and allows for thieves to market and sell devices that are activation locked with ease.

Last week, I saw an eBay listing for an iPhone 5s that was advertised with the activation lock where the seller described that he had “found the phone at the end of the night at a bar.” The thief was stupid enough to take an actual picture of the lock screen which had an activation lock message that had the original owners first name, e-mail address and phone number. The original owner also pushed a message to the activation lock screen that said “F*** you for stealing my phone.” The eBay listing had 32 bids and ended at $210. The seller had other similar active and completed listings with the activation lock advertised.

Activation Locked Apple iPhones on eBay

Take a look at eBay.com listings for activation locked iPhones within the past seven days that have the term “iPhone 5 activation lock” in the title (seen above). This only includes items where the title has “activation lock” present and does not include the majority of activation locked items that only have the word “activation lock” or similar terms in the description only.

Terapeak.com eBay Research on Activation Locked iPhones

Terapeak.com, an eBay market data research tool, shows the average price of iPhone 5 cell phones with activation locks coming in around $270 (including average shipping cost) and has a 73.3% chance of selling at this price. Definitely no issues getting great money for a stolen iPhone!

Activation Lock Creates More End-User Victims

End-users who are in the market for a used device are being victimized. They simply don’t understand that they need to check these for these features when buying a used device. While many will notice and refuse to buy, con-artists will use smooth words and slick sales tactics to off-load the device at higher prices to consumers who won’t conduct any proper due-diligence before buying.

Online marketplaces make this situation even more difficult when sellers can withhold the information from potential buyers and use loopholes in item condition terms of service to fraud impulse buyers who are unaware and fail to review the entire listing before making a purchase.

Number of thefts might go down, but in many cases the thieves will now have two victims instead of one

In addition, Apple has an iron-clad activation lock policy. The feature will forever be enabled unless the original iCloud user disables the feature. Legitimate device owners who forget their password and do not have access to the iCloud e-mail address on file will be unable to have their password reset through any other means.

Conclusion about Apple iCloud’s Activation Lock:

“Find My iPhone” is one step in the right direction towards preventing theft of iPhones, iPods and iPads. The amount of thefts that will be reduced will not be as significant as the press and law enforcement are expecting. Original owners are not forced to enable such a feature and thieves still have significant resale value that makes the theft worth the risk – not to mention that the markets to sell stolen phones are very liquid.

I’m not convinced this feature will have a huge impact as it stands, and I think something greater than an activation lock will have to be created to prevent theft. Without a doubt, Apple needs to come up with a way to prevent legitimate owners and secondhand users from inheriting a bricked phone if the original device’s owner simply forgot to disable the security feature.

Comments

How about when a hacker or jilted ex lover with the icloud password signs into your icloud account, changes your password, rescue email, security questions and answers, and then ERASES your phone and you are stuck on activation lock because you do not have the password or any of the answers, and also don’t have the proof of purchase because the jilted ex lover has it and won’t give it you, and APPLE won’t help you even though your iCloud ID is your name and you have photo ID to prove who you are. $500 brick.

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